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Doubts remain over asset manager preparedness for Mifid II

Experts have played down any immediate moves from the FCA towards those firms that are not prepared for Mifid II regulation that comes into force on 3 January 2018.

However, concerns remain that a “material number” of small asset managers have not yet started preparing for the major European regulation.

The FCA expects firms to be prepared for the deadline and said it would focus on  asset managers to track their progress on how they are reporting costs and charges.

If firms have made no real attempt to be ready for the regulation, the FCA has said it could take enforcement action against them.

Cleveland & Co managing director Emma Cleveland says many smaller companies “still don’t know where to begin” on their Mifid II preparation.

Some firms are even less prepared than originally thought with some not compliant with Mifid I either, she says.

Cleveland attributes the shortcomings to a lack of resources and budget and says many small firms are still looking for advice to update agreements required by the regulation.

Cleveland tells Money Marketing many firms are still getting their heads around the Mifid II product governance rules, which are the core rules for product manufacturers and distributors.

She says: “There are around 5,000 regulated financial services companies in the UK but there is still a material number of firms lagging behind.”

Personal Investment Management & Financial Advice Association deputy chief executive John Barrass echoes the comments and predicts many firms will forget to implement some of the new rules next year.

He says errors can be expected.

Barrass says: “[The reporting] of costs and charging will be difficult, there is no European template being prepared by asset managers.”

In particular, Barrass notes some family trusts and other firms in the retail sector could forget to apply the legal entity identifier status to clients at the point of financial transactions.

He says: “If firms are serving a trust or an organisation rather than a natural person they have to have a LEI to make a transaction report. I suspect you’ll get firms forgetting this.”

But experts dismiss fears of immediate action from the regulator for those firms.

Cleveland says: “It’s unlikely that the FCA will be knocking on doors of firms in Q1 and Q2 next year to check on MiFID II Implementation.”



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  1. Stop making a fuss. I’ll wager that a whole lot of Financial institutions in Europe are even further behind. This is just the usual UK nonsense of being ‘goody two shoes’ while pragmatic Europeans say ‘Yea’ and just go their own way.

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